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SAP touts makeover in customer software

After taking heat for its front-office software strategy, the German software giant trumpets its new customers and increased momentum in the industry.

ORLANDO, Fla.--SAP wants to convince the market that it is gaining a stronger foothold in the lucrative front-office software industry.

For some time, the German software maker was on the hot seat for its front-office software strategy, criticized by its customers and by the industry for being slow to the market. Executives here at the company's annual trade show, though acknowledging its poor perception in the market in the past, are showing off its makeover with new customers and increased momentum in the competitive sector.

The company said Wednesday that sales of its CRM (customer relationship management) software grew 50 percent since the beginning of this year, increasing its client roster to some 850 companies. CRM software automates and handles a company's front office activities including sales, marketing and customer service.

SAP and rivals Oracle and PeopleSoft have been zeroing in on the industry for the past few years, and along the way, have taken aim at toppling No. 1 market leader Siebel Systems from its throne.

"SAP was perceived a loser (in the market) two years ago," said Co-Chief Executive and Chairman Hasso Plattner during his keynote speech Wednesday. "We challenge now that we have a solution that can go head to head with Siebel."

Meta Group analyst Steve Bonadio said while SAP is sitting a lot prettier than it did a few years ago, it has a long way to go, like other players, before it can surpass Siebel. Bonadio emphasized that SAP needs to focus its attention on improving its messaging and its products, rather than beating out Siebel.

Siebel's core strength is sales force automation--applications that manage a company's sales leads and other sales tasks. Analysts have said SAP can get a leg up in the market if it improves the software's ability to tie together information housed in the front office with data that sits in the back office including accounting, human resources and manufacturing.

SAP's CRM software "is adequate for a good part of its customers," Bonadio said. "Twelve to 18 months down the road, it'll be more attractive to a broader audience" as long as the company focuses more on increasing the features of the software rather than touting its ability to steal market share from Siebel, he added.

Bernard Sanchez, SAP's vice president of global CRM field operations, said the company is touting the software's flexibility at the conference--its ability to allow customers to link SAP with different software systems.

"Where we are today (in CRM) is that our software is flexible, more open. We're understanding where the market is going," he said.

SAP is slated to make the next version of its line of customer service applications, dubbed MySAP CRM, generally available later this summer.